Contributed By CHSH Cerha Hempel Spiegelfeld Hlawati
In the course of takeovers, due diligence is rather the exception than the rule. In such cases, the scope of due diligence can be limited to only the publicly available information of the target. Pursuant to the Austrian Stock Corporation Act, Section 84 para 1a, a member of the management board of a stock corporation is said to be exercising the diligence of a responsible and conscientious corporate executive when taking business decisions if he or she does not allow him or herself to be guided by extraneous interests and if it may be reasonably assumed on the basis of adequate information that he or she is acting in the best interests of the company (Business Judgement Rule).
Defining the scope of the due diligence to be carried out is in particular a commercial decision based primarily on the Business Judgement Rule, knowledge of the relevant market and the target. When determining the scope of the due diligence, it always comes down to the relevance of the transaction, with the transaction volume playing a significant role. Due diligence can be conducted in a two-step process: in the first step, due diligence is carried out with certain restrictions. In the second step, comprehensive and unrestricted due diligence may be performed.